Law firm 'housekeeping' sweeps out 439 partners

By James Barnes

02 October 2012 at 10:57 BST

More than 400 partners shuffled through the exit doors of the UK's top-20 law firms in the last 12 months, as firms continued to impose 'good housekeeping' measures in the face of a continuing tough economic climate.

Ashurst and SJ Berwin were among the firms towards the top end of partner exit rates, with the former losing 24 from its ranks of 217 partners – an 11 per cent drop.
The top 20 firms saw 439 partners leave in total. While some former partners may have stayed on with their firms in consultancy roles, the research – conducted by Legal Week newspaper -- showed that 342 (78 per cent) were listed on the Companies House register as resigning from their firm's UK limited liability partnerships during the financial year running from 1 May 2011 to 30 April 2012 and leaving their firms altogether.

Low-growth environment

Wim Dejonghe, the managing partner of magic circle firm Allen & Overy, told the newspaper: ‘Greater financial and operational discipline is definitely necessary in order to remain competitive in a low-growth environment. For us, it's been a question of balancing the need for growth in the global network with continued focus on good housekeeping.’
Sheffield-headquartered Irwin Mitchell was the only firm where no partners left the firm in 2011-12.

US mergers

Meanwhile, the third quarter of 2012 produced a steady flow of US law firm mergers and acquisitions as the culture of ‘targeting’ strategic deals continued.
Research from legal profession consultants Altman Weil MergerLine revealed that there were 14 deals in the quarter – four mergers and 10 acquisitions.
The largest merger involved Californian personal injury firm Jacoby & Meyers and Chicago-based Macey Bankruptcy Law, which resulted in a combined firm of 300 lawyers with 135 offices in 50 states.
On the acquisitions side, major global player DLA Piper announced its intention to acquire Frieh Bouhenic, a 26-lawyer law firm in Paris, while Pepper Hamilton, a 500-lawyer firm headquartered in Philadelphia, acquired white-collar defence boutique Freeh Sporkin & Sullivan in Delaware, adding eight lawyers.  
‘Law firms continue to make acquisitions, but they are proceeding with a little more caution in 2012,’ said Altman Weil’s Tom Clay. ‘Most of the deals we’re seeing are small, highly targeted moves to boost expertise or enhance geographic footprint.  Firm leaders want to be sure they’re matching supply with demand to avoid diluting firm productivity even in the short term.’


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